Should My Brand Have its Own D2C Site? Pros & Cons

George Hatch

September 9, 2020

Amazon, Walmart Marketplace, eBay, Instagram—in the digital age, there is no shortage of channels to sell your products on, nor should you immediately rule any of them out. An omnichannel ecommerce approach allows you to give shoppers a seamless customer service experience, it raises your brand recognition, and it increases profits. That’s why it’s important to thoughtfully consider all of your options.

So what about selling on a direct-to-consumer (D2C) website? Here’s what you should know before making the leap.

Pros of the direct-to-consumer strategy

The D2C approach to business is extremely attractive to brands and manufacturers, and for good reason. D2C distribution, when it’s successful, allows manufacturers to cut out the middleman and enter the market directly to sell their goods, giving them greater control over their brand, their marketing, and their reputation.

Furthermore, a D2C site allows brands to offer as many of their products as they’d like at any time of the year (they aren’t limited by the seasonal/limited needs of retailers) and it streamlines the customer service experience. Interactions with customers are more direct, allowing brands to understand them better and address their needs more efficiently. Gone is being at the shifting whims and mercy of marketplaces like Amazon or Walmart. Instead, you’re providing a quality product with a quality experience uniquely your own.

Apple is an example of a D2C brand for whom this approach works very well. Apple has exceptionally good control over their products and the way their products are distributed. Customers know them and trust them to deliver a high-quality product, so they’ll traffic Apple’s website to make their purchases.

Apple D2C site pros and cons of direct to consumer | Pattern

Apple’s D2C gives customers a more intimate experience with their brand than they’d get on sites like Best Buy or Amazon, and because Apple customers are so loyal to the brand, it’s an experience they’ll seek out online.

Cons of the direct-to-consumer strategy

That said, the D2C approach isn’t a quick and easy path to success. It’s important to keep in mind that entering this space puts you in direct competition with sites like Amazon and Walmart. You have to consider what you’re offering that customers could not get from these places or from other places offline.

Because creating a website can be so expensive, it’s important to strategize about what does and does not work for your products and determine logistical factors that may aid or be an obstacle to your brand.

From just a pure revenue source or ecommerce channel growth perspective, I would argue that most brands probably shouldn't have a D2C site, unless there’s some sort of a niche or they’re going to be doing it in another unique way.

Is a D2C site worth it for you?

The equation that brands should focus on when considering if a D2C site is worth it is:

Purchase Velocity (or usage)/Price

If an item is a high-usage, low-priced item, it will be difficult to sell on its own on a D2C site without a specialized experience. If your brand sells a low-usage, higher-priced item, a D2C may be a great fit.

High usage, low-priced items

Low cost products with high usage, like toothpaste, soap, or pens may not make sense to build a D2C site around because customers are getting these products from other sources like Amazon without the additional costs for shipping, and they’ll have little incentive to purchase these products directly from brands.

I don’t know what consumer is going to go out of their way to type in “Snickers.com” to buy Snickers only from Snickers and wait for that package to show up on their doorstep when they could add that product to their Amazon or Walmart or whatever their normal routine grocery cart is.

If you do have a high usage, low-priced item, one thing that might make a D2C site worth it is building a unique customer service experience around your product, such as personalized product packaging, a monthly subscription box, or a one-time holiday gift bag.

Billie D2C site, subscription service, D2C hacks and tips | Pattern

Billie is one brand that sells a high-usage product on a D2C site that might otherwise not work except for the unique customer experience. Billie manufactures razors, and they offer a $9 subscription service that supplies customers with four new razor blade cartridges each month. Since their customers are already regularly buying razors, Billie’s competitive price point, their free shipping, and their monthly delivery service give them an edge up and a great use of their D2C site.

High priced items and luxury goods

For items with high price points and a low purchase velocity, a D2C site may be a great fit. Having a website for these goods allows you to build an intimate customer experience invested shoppers can look forward to and transactions shoppers can trust. This is especially important in the world of luxury goods.

As a consumer, I’m going to want to go to the source. I’m going to want to buy the Gucci bag, and I want it to show up on my doorstep in a Gucci box. I want to have that opening experience that’s very unique and custom, because I just dropped some serious cash, and there’s no way I want to risk that on Amazon or Walmart.

Gucci D2C experience, pros and cons of D2C for ecommerce brands | Pattern

The experiences you build around your brand on your D2C can also increase your name recognition and attract new customers.

Other products that may thrive with a D2C model are tech products, furniture, jewelry, and luxury goods, to name a few.

Consider logistics and shipping

Price points and product usage aren’t the only things you need to consider when considering a D2C. It’s also important to look at the logistics of distributing your product, particularly if you sell perishable items like meat or vegetables. It’s difficult for consumers to trust that products like this will ship to them without spoiling or being tampered with, which makes building a D2C experience around them a big risk.

If I sell chicken breasts in a grocery store, I’m not going to do the D2C site, because it has to ship cold, and the logistical challenges and the cost to ship are just so immense that it doesn’t make sense.

The other thing to look at is the cost to ship your products. When it comes to high-velocity, low-priced items, it’s essentially mandatory that brands offer two-day shipping, otherwise they won’t be able to compete.

If you can’t make that happen financially, you probably shouldn’t offer a D2C site. The more expensive and less volatile a product is, the less necessary two-day shipping becomes.

With the right plan and the right product, a D2C website can be a great channel to grow your brand and the customer experience with your brand. For more information on how you can start a D2C site or more resources for growing your business, contact our Pattern experts below.

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Amazon's Sponsored Product ads
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What Are Amazon’s Advertising Products? Sponsored Product, Brand, & Display Ads

What Are Amazon’s Advertising Products? Sponsored Product, Brand, & Display Ads

Utilizing Amazon sponsored ads can be a smart way for a brand to drive greater traffic to a product listing and start increasing sales. While many brands still struggle to manage their advertising strategies, 30% of Amazon brand sellers increased their advertising budgets in 2022. As ecommerce executives (or even on the nose with VPs of ecommerce?)  approve their 2023 advertising budgets, it may be worth it to take a look at Amazon’s advertising products and the benefit they may have on increasing conversions. 

​​Pattern is the premier ecommerce accelerator with all of the expertise, data-driven insights, and technology brands need to gain control on Amazon and maintain their competitive niche. We know the high value of and how to utilize Amazon’s advertising products to drive the most traffic and conversions to benefit and accelerate your brand.

Here are Amazon’s three main advertising products you should know about in order to drive listing traffic to your products and increase conversions: 

For a brand executive who is selling their product on Amazon, you may not already know the differences between campaign type, so we will walk you through the differences and uses for each of these three ad campaigns.

Sponsored Product Ads

Sponsored Products are a mid-funnel advertising strategy that gives visibility to products above the top organic listings (see example below). This strategy uses custom keywords to get products in front of the consumers who are searching for them, however it can be used to capture new audiences as well.These cost-per-click (CPC) ads require no additional copy or images, but usually receive the most interaction of the campaigns and need to be monitored closely.

As you can see, these ads look just like an organic listing, however they say, “Sponsored,” on them. These types of ads can be especially effective forms of advertising because they tend to blend in with the organic results around them. With Sponsored Products, you can get your products in front of qualified customers who are searching for your product in such a way that doesn’t make them feel like they are being served an advertisement.

Sponsored Brand Ads

Sponsored Brand Ads are a top-of-funnel brand awareness tool and function on keywords. This ad format helps show a customer what they may be in need of and where to get it.  Commonly used to promote product lines or best sellers, a Sponsored Brand ad shows up as a banner above the search results (see example below). This type of ad requires that the brand showcase at least three separate products.

Unlike other campaigns used on the Amazon platform, Sponsored Brand ads require ad copy and a unique logo. These ads also can take customers to a custom landing page, or a page on the brand store, that way they get a clear and overall picture about who your brand is, what other products you sell, and why they can trust your brand

Sponsored Display Ads

Sponsored Display ads can be a tactic for top, middle, or bottom of the advertising funnel due to its varying targeting abilities. Although most commonly found under the bullet points of a detail page, these ads can also show in emails, newsletters, and even more locations off platform.

Unlike the previous ad campaigns discussed, sponsored display ads can target shopping behaviors, like repeat purchasers, similar product purchasers, and even people who viewed the detail page but did not buy. Sponsored Display ads help customers discover your brand, drive awareness, and create loyalty. 

The example above shows just one of the many placements Sponsored Display has.

Accelerate Your Sponsored Products With Pattern 

Rather than competing with each other, each of the three sponsored ad products focus on a different section of the sales funnel, allowing you to target your customers and hit your sales numbers, all while edging out possible competitors. When brands use these advertising campaigns, they can better optimize their ad budget to improve ROAS and build revenue. 

At Pattern, we have all the resources to help your brand build successful advertising and digital marketing campaigns on Amazon so you can increase traffic and conversions, which will in turn increase your revenue

Global Ecommerce Weekly News: 27th September 2022
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Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)

Top 5 Ways to Prepare for Peak with Google Ads
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Top 5 Ways to Prepare for Peak with Google Ads

Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.

1. Go Early

In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.

From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.

2. Get Ready for Privacy Changes

 According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.

From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.

It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.

3. Ensure Consumers Can Discover your Brand

A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.

Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.

The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)

4. Get Moving with Performance Max

Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.

Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.

5. Flight Budgets Accordingly

Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.

Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.